Laurus Labs is coming out with an IPO on 6th December 2016 with a price band of Rs. 426 to Rs. 428, to raise upto Rs. 300 crore via fresh issue of equity shares of Rs. 10 each and an offer for sale (OFS) of upto 2.41 crore equity shares by the PE investors. A peer analysis of the company has been done to evaluate its financial performance in comparison to its peers with a view to help investors to evaluate if the issue is priced at a fair price from the point of subscribing to the IPO.
Laurus Labs is mainly into manufacture of active pharmaceutical ingredients (APIs), which account for about 90% of its revenue. The APIs mainly serve the therapeutic areas of anti-retrovirals (ARV), followed by Hepatitis C and Onclogy. Other areas include finished dosage formulations, Contract development and manufacturing services and specialty ingredients .
Comparison with Peers based on financials of Year 2016 & previous years. (Figures in Rs. Crore)
|Revenue from Operations||1,817.18||13,896.00||3,721.33|
|Profit Before Tax||167.56||2,722.46||1,371.84|
|Market /Issue Price||428.00||719.55||1135.85|
|CAGR sales 3 yrs||35.93%||33.38%||20.46%|
|CAGR Sales 1 yr||35.82%||13.79%||16.91%|
|CAGR NP 3 Yr||14.57%||87.89%||21.96%|
|CAGR NP 1 yr||94.02%||33.50%||10.37%|
Laurus Labs Limited has turned out a good performance in the year 2016 & half yearly results for the 6 months ended Sept 2016 are also encouraging. While this peer analysis does not bare the potential it may hold in coming years, based on past performance and broad financial ratios, the issue seems to be richly priced compared to peers Aurobindo Pharma & Divis Lab both of which seem to be on a much stronger wicket.